Large credit-card debts and hefty overdrafts do not tend to make people feel particularly lucky, and in the recession, banks have lent more to individuals than ever before. But these borrowers are the fortunate ones. The hardest-hit victims of the credit crunch are the ones who have neither a credit card nor a bank account, who are forced to do their borrowing elsewhere.

Almost two million people in the UK - the poorest families - have no access to a bank account. When they run out of cash, when the washing machine breaks down or when birthdays roll around, they have to borrow money at punitive rates of interest and become locked into spiralling debt.
At Barnardo's, we recently completed a year-long study of this crushing cycle. The findings were the catalyst for our new paper Counting on Credit, which lays out better, fairer, safer ways to help the poorest families to cope.

The basics cost more if you are very poor. As Gary, a father-of-two, told us: "I pay [gas and electricity] in cash . . . I get charged £280 a year more for having [a card/key meters]. People who pay by direct debit get a discount . . . People who can't afford to pay standing orders because they haven't got bank accounts, they're the people who get shafted."

It's not that Gary and thousands like him are feckless. High street banks don't want very low-income customers. Many of the poorest families can only get a Post Office card account: tax credits and child benefit can be paid in, but bills and standing orders cannot be paid out. There are more than four and a half million such accounts.

The real beneficiaries of this situation are the companies in the alternative credit market: the UK's largest, Provident Financial, netted 558,000 new customers last year. As its application form explains, the APR on a loan of £300 paid back over 50 weeks is 254 per cent.

The poor do have alternatives. When that washing machine breaks down they can replace it with a new one bought on credit. One retailer's catalogue includes a washing machine, available on the high street for £337, but which, paid for by a struggling family over three years, costs a numbing £1,137.

Poor families need better ways to handle their money and their debt. At Barnardo's, we want banks to make it easier for those without a passport or a driving licence to meet ID requirements.

We want to see the government encouraging banks to reach out to more families and providing easier access to the Social Fund. But most of all we want the Office of Fair Trading to examine the alternative credit market that so effectively draws families into unaffordable debt.

Martin Narey is chief executive of Barnardo's